Teck to put US$700mn into Chile's QB2 project this year

Canadian firm Teck Resources will place much of its focus on Chile this year to complete key areas of its Quebrada Blanca phase II (QB2) copper project in northern Tarapacá region, as well as to address the impacts of drought at its Carmen de Andacollo red metal operation in north-central Coquimbo region and deal with high costs.

The company plans to invest up to US$700mn in QB2 to conclude pending construction in the port area in Punta Patache, 50km from Iquique, in the first half of the year. That will enable it to avoid relying on alternative logistics routes, which have resulted in greater expenses for the Vancouver-based firm, it said in a report.

Another issue on the agenda for QB2, which involves investments of around US$8.8bn, is its molybdenum line. Construction of the plant for molybdenum output was completed in December and it will be commissioned throughout this year.

Starting in 2025, Teck expects to produce between 2,900t/y and 3,600t/y of molybdenum before gradually scaling up to average output of 7,500t/y by 2027, it added.

Although QB2 was inaugurated in October, several developments remain pending, such as the expansion of the mill, which is why copper production in 2023, including copper cathodes, only reached 62,800t of an estimated 90,000-110,000t. 

However, Teck aims to reach production of 230,000-275,000t of copper this year at Quebrada Blanca, accompanied by a mining plan that will allow it to advance towards the maximum production target of 310,000t/y in 2025-27.

The high costs of inputs, for buying equipment and also hiring labor and contractors, will continue to be a significant factor for at least the first half of this year, as a consequence of persistent inflationary pressures, Teck said.

For this reason, companywide net cash costs after byproduct credits will remain at between US$1.85/lb and US$2.25/lb, it added.

Meanwhile, Teck is planning to take measures to reduce the impacts of the severe drought affecting the area where Carmen de Andacollo is located. Copper production at the mine in 2023 reached 39,600t, below the projected minimum, and this year it is expected to produce a similar volume.

However, Teck aims to reach maximum production of 60,000t/y at the unit in 2025 and 2026, it stated.